Gina Cocking comments to Auto News on Protective Asset Protection purchase of Portfolio Holding, Inc.
Key Takeaways
- Protective Asset Protection will acquire Portfolio Holding Inc., uniting two F&I consolidators.
- Closing on Portfolio, currently an Abry Partners subsidiary, is expected by year end.
- The deal for Portfolio Holding brings F&I contract volume, reinsurance expertise and a footprint of about 4,000 client locations to Protective Asset Protection.
Protective Asset Protection will buy competitor Portfolio Holding Inc. in an acquisition that will bring together two large consolidator auto dealership finance and insurance product providers.
“This is significant,” Scott Karchunas, president of Protective’s Asset Protection Division, told Automotive News on Oct. 30. “Portfolio had been scaling themselves. … These are two companies that are writing handfuls of millions of contracts annually. And now we’re putting them together.”
Protective has 9,000 active clients across all its businesses, though some are in segments outside of traditional auto retail, such as the RV industry, Karchunas said. Portfolio works with about 4,000 locations nationwide and is known for expertise in reinsurance, a common additional dealership revenue stream involving sharing in the profit generated over the life of a F&I contract.
“Portfolio is the name in [reinsurance],” said Gina Cocking, CEO of Colonnade Advisors, a F&I industry mergers and acquisitions consulting firm.
Karchunas said Portfolio represents another “best of breed” purchase for Protective, similar to prior acquisition targets United States Warranty Corp., whose strength was dealer-owned service contracts, and AUL, whose expertise was F&I products for high-mileage vehicles.
“I think this is a great fit for Protective,” Cocking said Oct. 31. She said it “almost repositions” the company.
“They are no longer just a product provider,” she said. “They are a true partner to their dealerships with this acquisition.”
Protective’s deal with Portfolio owner Abry Partners is expected to close by the end of 2025.
“Joining with Protective opens an exciting new chapter for our team as we seek to scale our impact across the dealer community,” Portfolio CEO Jeremy Lux said in a statement Oct. 30. “Abry Partners has been an outstanding partner in accelerating our growth and innovation capabilities and played a critical role in positioning us for long-term success. Now, through Protective’s established network and market expertise we have a powerful platform to enable us to deliver our proven solutions to a broader dealer base.”
Abry purchased Portfolio from another private equity firm, Capital Z Partners, in 2019. Since then, Portfolio more than tripled revenue and bought 17 F&I administrators and agents, according to Abry. Protective’s parent company has done eight acquisitions, including the AUL and U.S. Warranty deals, since it was purchased by Dai-ichi Life Holdings in 2015.
“At our initial investment, Portfolio was already a known leader in dealer wealth and reinsurance solutions, and we saw the opportunity to further scale the business through strategic acquisitions, technology investments, and operational enhancements,” Christopher “Kip” Turco, an Abry partner, said in the statement.
“Protective’s Asset Protection Division has become an increasingly important part of our business, and this acquisition marks another milestone in its evolution,” Rich Bielen, CEO of Protective parent Protective Life Corp., said in the same statement. “Portfolio brings a strong track record in dealer wealth programs and a deep understanding of what it takes to help dealers succeed. While life insurance and annuities remain the foundation of our company, expanding our Asset Protection Division enhances our ability to protect more customers and deliver enduring value.”
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